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Federal officials announced on Wednesday that a Russian citizen who exploited a crypto exchange that became a port for the proceeds of illegal activities was arrested.
U.S. authorities have collared 40-year-old China-resident Anatoly Legkodymov on claims that his Hong Kong-registered crypto trading platform, Bitzlato, processed hundreds of millions of dollars in dirty money.
Tuesday night, agents of the Federal Bureau of Investigation apprehended Legkodymov in Miami.
The Ministry of Justice said on Wednesday that Bitzlato was taken offline as part of a "global operation to enforce cryptocurrencies."
Lisa Monaco, Deputy Attorney General, described the arrest as a "major coup a l'ecosysteme crypto-criminel."
The Crypto Exchange Bitzlato's dirty money.
The DOJ alleged that Bitzlato, either directly or through third-party conduits, exchanged more than $700 million in cryptocurrencies with users of Hydra Market, a darknet marketplace for drugs, fraudulent IDs, and other illegal goods.
The Department of Justice and German law enforcement have taken measures against the hydra market, which led to its closure in April of last year.
Illustration: The Moscow Times.
US lawyer Breon Peace states:
"Institutions dealing in cryptocurrency are not above the law and their owners are not out of our reach."
The people involved in the surgery, in Monaco's view, initiated a "coordinated disruption campaign" which included policing activities in a number of European countries and the confiscation of Bitzlato's computer networks.
The Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury Department issued an order naming Bitzlato as a “major money laundering concern” in relation to Russian illegal funding.
Bitzlato and his clients in the United States.
Legkodymov is also accused of carrying out Bitzlato transactions from Miami from 2022 to this year, and receive "high traffic" reports to its website from IP addresses located in the US. The Department of Justice reported that over 250 million visitors visited the site in July 2022.
Reuters reported that the website of bitzlato was replaced on Wednesday with a notification that the service was disabled by the French authorities.
Bitzlato was a crypto company little known before Wednesday's action and has handled around 4.5 billion dollars in Bitcoin transactions since 2018, according to regulators.
Meanwhile, the owners of bitzlato revealed by telegram that the exchange had been jeopardized.
They advised customers that withdrawals were on hold indefinitely and requested that they stop sending parts to the site until the issue was resolved.
Crypto total market cap at $924 million on the daily chart | Chart: TradingView.comLegkodymov was detained on Wednesday, and it was not known if he had a lawyer who could speak for him.
According to the Department of Justice, if he is found guilty of operating an illegal money transfer business, he faces a maximum sentence of five years imprisonment.
Chainalysis, a blockchain analytics company, revealed last week that illicit transfers of cryptography reached a record level of $20 billion by 2022, mainly due to higher sanctioned crypto addresses.
Spotlight on Ronstik/Alamy.
